Posted
by
timothy
on Thursday February 24, 2011 @04:10PM
from the we-don't-like-you dept.

An anonymous reader writes "The online payment provider PayPal has frozen the account of Courage to Resist, which in collaboration with the Bradley Manning Support Network is currently raising funds in support of US Army Pfc. Bradley Manning. 'We've been in discussions with PayPal for weeks, and by their own admission there's no legal obligation for them to close down our account,' noted Loraine Reitman of the Bradley Manning Support Network (Support Network). 'This was an internal policy decision by PayPal. ... They said they would not unrestrict our account unless we authorized PayPal to withdraw funds from our organization's checking account by default. While there may be no legal obligation to provide services, there is an ethical obligation. By shutting out legitimate nonprofit activity, PayPal shows itself to be morally bankrupt.'"

I work for a non-profit that does nothing remotely controversial and we have had to deal with the exact same issue. PayPal forces EVERYONE to withdraw from a bank account by default. They make no distinction about who they are dealing with and they care less about non-profit status. Because they are a quazi-monopoly on ebay payment they pretty much force people to do what they want if you want to buy or sell on ebay.

If you want to be outraged, be outraged that the they use their monopoly status to force their fingers into bank accounts, not that the made some political move they actually didn't make.

I work for PayPal, but don't have any knowledge of why this decision was made first hand.

I can say that in many past cases where a non-profit's funds were frozen, and everyone makes a stink about how evil PayPal is, it comes down to the fact that after the Patriot Act, PayPal is obligated by law to make sure non-profits file extra paperwork to prove their status. I think Xorg's funds were frozen for a while and everyone interpreted as PayPal hating open source, when in reality they just forgot to file paperwork.

This certainly could be PayPal refusing to do business with anyone associated with WikiLeaks after Anonymous tried a DDoS attack on api.paypal.com, but it could also be another technicality.

"They said they would not unrestrict our account unless we authorized PayPal to withdraw funds from our organization's checking account by default"

Set up an account that only has PayPal deposits in it. Transfer that money daily to another account they do not have access to. At the wost, paypal can only take back the money they have deposited for that day. Problem solved and everyone's happy.

Lied? that article says exactly the same as TFS and TFA: CtR set their account up and started receiving money, PayPal asked them unrestricted access to their bank account in exchange for being recognized as a non-profit, CtR refused, PayPal blocked their account until they cave in. And since that they state nowhere just *why* do they require unrestricted access to non-profits' bank accounts, I'm still leaning on "bunch of amoral scumbags" as far as PayPal goes.

Peter Thiel [wikipedia.org], who's gone on to fund libertarian projects like the Seasteading Institute. But he and the other founders of PayPal sold out to eBay years ago, so you can't blame him for its current morally bankrupt decisions.

That policy does not apply only to 501(c)(3)'s. They were emphasizing that it also applies to them.

PayPal needs you to have a bank account for at least two reasons: 1. identification; the presumption being if a bank believes you are who you are, then you are; for what that's worth. 2. to fund your account automatically if you make a payment from your PayPal account in excess of your PayPal balance; there's actually a whole list of things PayPal can try in order to cover your payment, so having an empty bank account isn't automatically going to stop the transaction.

CTR is full of crap, is ladling it out generously, and a whole slew of slashdotters are eating it with relish and ketchup on top.

It says nothing about PayPal demanding "unrestricted access" to a bank account. It further goes on to state that they are _not_ seeking the ability to unilaterally withdraw money from the bank account.

PayPal simply requires that all non-profit accounts be linked to a bank account-- among other things you have to go through too, to confirm your non-profit status. In return for this sort of thing, PayPal charges less on the transaction fees.

Its actually a pretty clearly spelled out policy... non-profit accounts have to be linked to a bank account. That _doesn't_ mean you have to grant PayPal the ability to roam around the bank account and do anything they want to.